Sears Tower Leases 225,000 SF in Three Months

The lease is great news for the 3.5-million-sf tower, says Tom Dempsey, vice president and general manager with American Landmark Properties, which owns the building. The building has suffered since Sept. 11, 2001 and with the lackluster office market the past two years. Dempsey worked with John Dempsey of CB Richard Ellis on the deal.

In most Chicago office buildings, 225,000 sf would be an significant tenant addition. He says he cannot name the other new tenants. "We're about 80% occupied right now, this will bring us up to about 84%," Dempsey tells GlobeSt.com. "We've seen velocity tick up tremendously in the past six months, we've had a lot of tours in the building."

Bob Chodos and Steve Levitas with Colliers Bennett & Kahnweiler represented the law firm in the deal. Chodos agrees with Dempsey that it's hard to show a great gain in occupancy in such a large building. "The building is it's own market in itself," Chodos says. "A 5% vacancy rate in that building would be 25% vacancy in other buildings."

Chodos says the rest of Downtown, especially the West Loop area, is seeing a large resurgence. "I think you get that much space in the Sears Tower, some of the impression of weak office market is eroding. Rents up and down Wacker Drive are starting to recover substantially. Vacancies are getting down below 15%, and if you look at vacancies above the 30th floors, I would bet vacancies are lower than 6%."

Lease rates are going up in major buildings, Chodos says. At the Sears Tower, they're at the mid-teens net, but there are other buildings Downtown in the high 20s, such as 123 N. Wacker, Chodos says.